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Test Bank for Horngren's Cost Accounting A Managerial Emphasis 9th Edition (Canadian Edition) By Srikant Datar, Madhav Rajan, Louis Beaubien, Steve Janz (All Chapters, 100% Original Verified, A+ Grade)$8.49
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Test Bank for Horngren's Cost Accounting A Managerial Emphasis 9th Edition (Canadian Edition) By Srikant Datar, Madhav Rajan, Louis Beaubien, Steve Janz (All Chapters, 100% Original Verified, A+ Grade)
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HORNGREN/\\\'S COST ACCOUNTING A MANAGER
Institution
HORNGREN/\\\'S COST ACCOUNTING A MANAGER
Test Bank for Horngren's Cost Accounting A Managerial Emphasis 9th Edition (Canadian Edition) By Srikant Datar, Madhav Rajan, Louis Beaubien, Steve Janz (All Chapters, 100% Original Verified, A+ Grade)
Test Bank for Horngren's Cost Accounting A Managerial
Emphasis 9th Edition (Canadian Edition) By Srikant Datar,
Madhav Rajan, Louis Beaubien, Steve Janz (100% Original
Verified, A+ Grade)
Exam format: - (ANSWER)ch. 6 = 10 concept, 8 math
ch. 7 = 8 concept, 9 math
ch. 21 = 8 concept, 7 math
A budget is ______ - (ANSWER)(a) the quantitative expression of a proposed plan of action by
management for a specified period
(b) an aid to coordinate what needs to be done to implement that plan.
Financial Budget ______ - (ANSWER)quantifies managers' expectations regarding a company's
income, cash flows, and financial position.
To develop successful strategies, managers must consider questions such as: - (ANSWER)1)
What are our objectives?
2) How do we create value for our customers while distinguishing ourselves from our
competitors?
3) Are the markets for our products local, regional, national, or global? What trends affect our
markets? How do the economy, our industry, and our competitors affect us?
,4) What organizational and financial structures serve us best?
5) What are the risks and opportunities of alternative strategies, and what are our contingency
plans if our preferred plan fails?
Master budget: - (ANSWER)(a) expresses management's operating and financial plans for a
specified period, usually a fiscal year, and it includes a set of budgeted financial statements.
(b) is the initial plan of what the company intends to accomplish in the period and evolves from
both the operating and financing decisions managers make along the way.
Operating decisions: - (ANSWER)deal with how to best use the limited resources of an
organization.
Financing decisions: - (ANSWER)deal with how to obtain the funds to acquire those resources.
pro forma statements: - (ANSWER)The terminology used to describe budgets varies among
companies. For example, budgeted financial statements
budgets do the following: - (ANSWER)1) Promote coordination and communication among
subunits within the company
2) Provide a framework for judging performance and facilitating learning
3) Motivate managers and other employees
Coordination: - (ANSWER)is meshing and balancing all aspects of production or service and all
departments in a company in the best way for the company to meet its goals.
,Communication: - (ANSWER)is making sure all employees understand those goals.
Coordination forces executives to think about the relationships among individual departments
within the company, as well as between the company and its supply chain partners.
Budgets enable a company's managers to measure _______________ __________________
against ____________ _______________. - (ANSWER)Actual performance against Predicted
performance.
Budgets can overcome two limitations of using past performance as a basis for judging actual
results: - (ANSWER)1) One limitation is that past results often incorporate past miscues and
substandard performance.
2) The other limitation of using past performance is that future conditions can be expected to
differ from the past.
One of the most valuable benefits of budgeting is that it helps managers gather infor- mation for
improving future performance: - (ANSWER)When actual outcomes fall short of budgeted or
planned results, it prompts thoughtful senior managers to ask questions about what happened and
why and how this knowledge can be used to ensure that such shortfalls do not occur again. This
probing and learning is one of the most important reasons why budgeting helps improve
performance.
Budgets are typically developed for a set period, such as: - (ANSWER)a month, quarter, or year,
which can be then broken into subperiods.
**** For example:
a 12-month cash budget may be broken into 12 monthly periods so that cash inflows and
outflows can be better coordinated. ****
Rolling budget (continuous budget or rolling forecast): - (ANSWER)is a budget that is always
available for a specified future period. It is created by continually adding a month, quarter, or
year to the period that just ended.
, the five-step decision-making process introduced in Chapter 1: - (ANSWER)1) Identify the
Problem and Uncertainties
2) Obtain Information
3) Make Predictions About the Future
4) Make Decisions by Choosing Among Alternatives
5) Implement the Decision, Evaluate Performance, and Learn
Activity-based budgeting (ABB): - (ANSWER)Budgeting approach that focuses on the budgeted
cost of the activities necessary to produce and sell products and services.
Budgetary slack: - (ANSWER)The practice of underestimating budgeted revenues, or
overestimating budgeted costs, to make budgeted targets more easily achievable
Cash Budget: - (ANSWER)Schedule of expected cash receipts and disbursements.
Controllability: - (ANSWER)Degree of influence that a specific manager has over costs,
revenues, or related items for which he or she is responsible.
Controllable Cost: - (ANSWER)Any cost that is primarily subject to the influence of a given
responsibility center manager for a given period.
Cost Center: - (ANSWER)Responsibility center where the manager is accountable for costs only.
Financial Planning Models: - (ANSWER)Mathematical representations of the relationships
among operating activities, financial activities, and other factors that affect the master budget.
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